Commodity funds opened the month holding record bullish views in Chicago-traded soyabean meal and record bearish views in soyabean oil, creating the most lopsided speculative positioning in history between the two soya products.
As of May 1, investors held an all-time bearish stance in the CBOT oilshare, which measures soyaoil's share of value in the soya products. A lot of this has to do with a suspected tightening in global exportable soyabean meal supply, led by both weather and logistical problems in lead exporter Argentina. In the week ended May 1, hedge funds and other money managers boosted their CBOT soyabean meal net long to a record 133,549 futures and options contracts from 105,421 in the prior week, according to data from the US Commodity Futures Trading Commission.
The previous record for the managed money meal net long was 115,500 futures and options contracts set in the first week of March 2018. Speculators in the "other reportables" category are not quite as bullish soyabean meal as they had been back in February. But combining this position with the managed money position through May 1 yields a whopping 166,296 futures and options contracts.
Money managers' net short in CBOT soyabean oil futures and options also hit a new record through May 1 of 73,540 contracts versus 52,726 in the week before. The previous record bean oil short was 64,537 contracts set in January 2014.
This was spurred on by strength in meal futures, which set across-the-board contract highs on Tuesday. Soyabean oil had fallen victim to meal-oil spreads as well as healthy crush volumes out of the United States and weakness in other global vegoil markets.
But unlike the unanimous view toward meal, not all speculators are bearish soyabean oil. Over the last couple of months, traders in the "other reportables" category have carried a record bullish stance toward the vegoil. Soyameal futures on Tuesday hit their highest levels since June 2016, and in the days since, profit-taking and unwinding of long soyameal/short soyaoil spreads have created a little more balance in the CBOT oilshare.
Traders estimate that commodity funds were straight sellers of soyameal and straight buyers of soyaoil between Wednesday and Friday. In the week ended May 1, money managers increased their net long in CBOT corn futures and options to 186,317 contracts from 122,877 in the prior week. US corn plantings were already expected to be down on the year and as of April 29, planting pace was the slowest in five years. Speculators had also been eyeing drought development for Brazil's heavily exported winter corn crop.
Money managers also extended their net long in CBOT soyabean futures and options through May 1, to 177,047 contracts from 170,094 a week earlier. Last week's soyabean gains were largely linked to strength in soyabean meal, because otherwise, traders have had a rather tepid view on soyabeans over China's slapping of tariffs on US beans last month.
The US-China issues got the better of soyabeans late last week, especially on Friday, as market-watchers were hoping for more progress from trade talks between Beijing and Washington. China's Xinhua news agency reported on Friday that the talks had ended with "relatively big" disagreements. Trade sources indicate that commodity funds were net sellers of soyabeans and very slight net sellers of corn over the last three sessions.
Speculators last week adopted their least bearish stance toward soft red winter wheat since early August. Through May 1, money managers slashed their net short in CBOT wheat to 28,702 futures and options contracts from 54,713 in the prior week. Although investors were covering CBOT wheat shorts last week amid US crop uncertainties, the establishment of new longs was a bigger factor in money managers' latest move.
In the five days ended May 1, K.C. July wheat futures surged 8 percent as market participants awaited the start of the annual hard red winter wheat tour through the top US wheat state of Kansas. However, speculators may have believed that the market had already accounted for crop losses stemming from a historically dry growing season in the Southern Plains.
Money managers slightly trimmed bullish bets in K.C. wheat futures and options through May 1 to 39,231 contracts from 40,698 a week earlier, the result of a slight reduction in longs and an even slighter increase in shorts.
They also flipped back to a bullish stance in Minneapolis wheat through the same period, establishing a new net long of 1,000 futures and options contracts versus the net short of 1,435 contracts in the previous week. Although positioning changes in hard red spring wheat have appeared relatively slight over the last few months, the latest number of outright managed money longs - 9,032 - is the largest since the beginning of September.
The wheat contracts surged again on Thursday as Kansas crop tour scouts pegged state production at the smallest volume since 1989. But rains in the US Plains and technical selling pressured prices on Friday. Market estimates suggest that commodity funds were net sellers of CBOT wheat futures between Wednesday and Friday.
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